Episode 21 – The History of MMT with Mathew Forstater

There was a time when Mathew Forstater & Warren Mosler would conduct regular counts of MMT believers. There were 11 or 12, and they knew them all well. In this interview, Forstater takes us back to the late 1990s, when Modern Monetary Theory first took root in academia.

Today he is Research Director of the Global Institute for Sustainable Prosperity, but his story begins with his first post-doctorate teaching job. He secured a summer internship for an undergrad named Pavlina Tcherneva. Her assignment: write a critical review of Mosler’s first book.

The relationships they formed resulted in the creation of a research institute, the Center for Full Employment and Price Stability at the Levy Institute. Randall Wray and Stephanie Kelton descended upon it. After a couple of years, the MMT nucleus moved to UMKC, where they established an interdisciplinary program. Today it’s an international movement with a reach into other disciplines and far beyond the walls of universities.

Forstater emphasizes the importance of keeping policy discussion on the table. What distinguishes them from mainstream economics is they recognize the need to be grounded in reality. MMT is not just theoretical.

Steve asks him to talk about some of the specific policies associated with MMT. Forstater believes that the Job Guarantee should be a central piece of Green New Deal by demanding only sustainable jobs, or jobs with minimal negative effect. The federal government isn’t subject to the pressures of the private sector which, by the very nature of the capitalist economy, must minimize production costs regardless of environmental impact. The JG can be a vehicle for other policies as well, establishing a minimum wage and standards for health care coverage.

Global Institute for Sustainable Prosperity

www.global-isp.org/research-director/

Macro N Cheese – Episode 21 
The History of MMT with Mathew Forstater 
June 22, 2019  

Mathew Forstater [intro/music] (00:00): 

A job is green or a job is environmentally sustainable, if it does not harm the environment. The best achievement for a teacher is for their student to surpass them. Warren (Mosler) used to call me on the phone in the middle of the day at work, and he would say, so how many people in the world understand how money works now? And I would have to name them. 

Geoff Ginter [intro/music] (00:41): 

Now let’s see if we can avoid the apocalypse all together. Here’s another episode of Macro N Cheese with your host, Steve Grumbine. 

Steve Grumbine (01:29): 

All right. Good evening, everybody, it is Steve with Real Progressives. I have Mat Forstater joining me. He is a professor at UMKC, he is also the Research Director at the Global Institute for Sustainable Prosperity. Without further ado, I’d like to bring on Mr. Forster, Mat, how are you doing, sir? 

Mathew Forstater (01:56): 

Great, Steve, great to be here. Thanks for having me. How are you? 

Steve Grumbine (02:00): 

I’m great, man. It’s been a long time. I’ve wanted to have you on here for a long, long time. You’ve been around this thing for a long time. I mean, you’ve known the key people. You’ve been part of this thing from early, early on. Tell me a little bit about how you got involved in the Modern Monetary Theory development team and getting involved in bringing the school of thought to the public. 

Mathew Forstater (02:27): 

Right, so in 1996, I was a young, new assistant professor at Gettysburg College in Pennsylvania. I just finished my PhD, and one of the things that I think I can say is that I have always had my door open to students. And especially early in my career, there was often a long line out the door and doing anything for students.  

So when a student came in and asked in, maybe April, if I knew of any summer internships, it was a tough one because usually internships get settled, you know, back in February or somewhere around there. So in any case, this was in the mid 1990s, it was still somewhat early days for email, and so on. The long story short is that the student was Pavlina Tcherneva, and she’s, I’m sure well known to all your listeners. 

Steve Grumbine (03:38): 

Yes she is. 

Mathew Forstater (03:39): 

And the internship that she ended up doing was with an individual from Florida who was a very successful business person who dabbled in economic theory named Warren Mosler. So in any case, her assignment was to write a critical review of something that he had written and self-published, which again, I’m sure many of your listeners know of, “Soft Currency Economics,” the first real detailed piece that I’m aware of that Warren had done.  

So over the summer, basically Pavlina and I worked together on email, phone, fax, and however, her being down in Florida and I was still at Gettysburg. And I mean, she was an undergraduate, very capable, but she had limited exposure to, say post-Keynesian monetary theory. And so I kind of had to do a combination introduction to post-Keynesian economics.  

And then as she was discovering things about Warren’s ideas and then reading “Soft Currency Economics,” that there were connections between his ideas, and I mean, other than maybe trying to read the general theory and the fact that he had been an undergraduate economics major at Connecticut, Warren had very limited exposure to the history of economic thought, heterodox economics or anything like that.  

But there were many connections between his ideas and especially kind of post-Keynesian and institutionalist monetary theory, endogenous money, exogenous interest rates and so on. So all of that, but of course, Warren had his own extensions and, not extensions because he wasn’t familiar with that stuff at all.  

So anyway, that’s what happened, and really as a gesture of appreciation to Warren for giving Pavlina these opportunities, she was able to go to a concert at Bretton Woods, 50th anniversary of the Bretton Woods Conference and meet many economists, including Randy Wray and Basil Moore, Charles Goodhart.  

So as a gesture of appreciation, I offered to organize a panel at the Eastern Economic meetings. This would be in the fall of 1996, and Warren would present his ideas, Pavlina would present her piece, and then I invited three people to be discussants, Randy Wray, Yan Kragle, and Edward Nell, my former teacher from the New School.  

And there was a big turnout. I forget, there had been also, maybe a celebration that year of, maybe cause Minsky had passed away or something like that. There was a lot of, so anyway, the room was packed and that was the first time I actually met Warren in person. I had spoken with him on the phone over the summer and we had had a significant conversation.  

Actually, I hadn’t intended to speak with him, but I was on the phone with Pavlina, she was saying something to me, I would say something back to her, then she would talk to somebody in the background, who would say something to her, she would say it to me back and forth and then finally, Pavlina said here, “Talk to Warren, he wants to talk to you, he wants to talk to you.” That’s exactly the way she said it, he wants to talk to you. So he got on, said, “Hi, how you doing? He said, so what do you think of all this?” And I mean, I didn’t have a lot of experience, I was young and I didn’t know any people like Warren, and not that there are people like him. In any case, I said how interesting it was or whatever, and he said, “So what do you think I should do?”  

So really the only thing I could think of was that if this person was very serious about pursuing this, I said, “You could start a research institute.” And immediately he said, “What would be the highest position in such an institute you would be willing to accept?” Crazy. 

Steve Grumbine (08:12): 

Lord Emperor? 

Mathew Forstater (08:15): 

Well, I mean, I literally had just received my PhD a couple months before that. I had very little experience. I had maybe one or two publications, which were not in a field that anyone, if you weren’t familiar with it, would think had any necessary connection to this and so on and so forth. And we didn’t continue the conversation then, but as things developed and some people who he asked, I guess, or either a recommendation for me or what they thought about it, all told him he’s too young, it’s not really his field.  

And the more tried to dissuade him, it seemed the more determined he was that I would be involved somehow. So in any case, the rest is history. I went on leave from Gettysburg, Randy Wray went on leave from Denver, where he was at the time. And we went to the Levy Institute. Randy had, of course, long association with the Levy Institute, and he had spent time there before.  

But I had done some work for the Levy Institute as a graduate student. Their first and second conference, I was involved in helping to organize and assisted in editing the bulk that came from the papers. So I had familiarity with the Levy Institute, but I went there. It was supposed to be for a year, then it ended up becoming two years.  

And Stephanie Kelton, then Stephanie Bell, came from Cambridge where she had completed a masters of MPhil degree, it’s sort of like what we call all but dissertation here in the US, I think. In any case, she had been a student of Randy Wray, or at least, Randy’s teacher, John Henry, and then had gone to Cambridge and then came to the Levy Institute and Pavlina had applied for and secured a prestigious fellowship with the Levy Forecasting Center, which is no longer connected to the Levy Institute.  

But in any case, she spent two years there and I think had a lot of great experiences, and of course was able to attend a lot of the activities at the Levy Institute. And then Yan Kragle, Edward Nell and Charles Goodhart had already been involved. So we really started working together as a team, sort of, and started to publish through the Levy Institute and to organize conferences.  

And I started an Institute, the Center for Full Employment and Price Stability, and I think, you know, it has a lot of really great history of activities that were funded, supported, the research that was able to come out so that we could refer in speaking to those audiences that need ideas to have academic credibility, to more and more articles that we were publishing in journals and books and so on and so forth.  

And then after two years, we all moved out to Kansas City and started the, well, didn’t start the program there, but sort of revived their interdisciplinary PhD program. And so we’ve been able to have so many fantastic students, which probably is what I feel will ultimately be my biggest contribution is in education.  

When I was younger, I always believed that education had the power to change the world, but that it takes so long, it seemed to me when I was young, but now that I’m older and I see, over 20, 40 year career of advising doctoral students or supervising doctoral students, you can have a tremendous impact.  

That is something that’s not measured in likes on the internet, you know, nothing against that, but just that it soon became apparent that what we wanted to accomplish, which would be introducing a new paradigm in thinking, even though it had many, many connections to ideas of the past, this was something new in a lot of ways.  

So it was going to require a multipronged strategy. And so eventually kind of everyone, you know, settled into their role. And now the Center for Full Employment and Price Stability has closed its doors a few years ago, and I was able to start a new Institute, also through one of my students. I was able to start the Global Institute for Sustainable Prosperity, and another of my former students Fadhel Kaboub, who, you know, well, is the president, best decision I ever made. 

Steve Grumbine (13:14): 

He’s phenomenal. I want to ask you something before you get too far ahead. So Bill Mitchell plays a role here somewhere in this mix, cause we’ve heard the US-based MMTers, the UMKC side of things, at what point did bill pull into Warren’s world and then the global move align. How did that come to be? 

Mathew Forstater (13:36): 

So let me try to briefly, which I obviously have trouble with, but just say that I have learned a few things in the 20 years since I was that new PhD getting these tremendous opportunities. And one is that memory and history are very tricky things. I mean, it should go without saying, but I am giving my perspective, terms.  

It necessarily, it doesn’t see the complete picture. I did have more, all of a complete picture than many had because one of the things was that people would, one of the problems is that heterodox economics does not get a lot of respect or funding. So when people find out that someone is, you know, generously supporting some heterodox ideas, you know, they will try to apply for some themselves.  

So some people, you know, if they were friends of mine or whatever, they would ask me, you know, Hey, I have an idea, blah, blah, blah. But others would skip over me because, who was I, and send a letter to Warren saying I’d like a million dollars and I would use it for X, Y and Z. And Warren would send the letter to me, I mean, so I have all the correspondence, pretty much.  

But there’s one part that I, I mean more than one part, many parts I left out, and one is the role played by the email discussion list, which I guess they still exist, but blogs kind of superseded, but they used to be very popular. Everybody subscribes to a certain email list and you get all of the posts to that list, and everybody who’s subscribed to the list sees all the posts.  

So anyway, Bill Mitchell was on this post Keynesian thought email list, that’s where I first, I think, saw his name. And so he was engaged directly and Warren was on it, and Wray, and myself, and Paul Davidson and anybody interested in post Keynesian economics was on that list. And Warren wanted to get feedback from people and he was not afraid to put his ideas out there.  

And he would comment on any topic from his perspective, seeing it through, you know, the Mosler lens. And so we all got very involved, so I met Bill online first, but cofFEE is as old or almost as old as [inaudible]. I mean, at least around the same time. And I attended the first two of the Center of Full Employment and Equity cofFEE, Bill Mitchell’s Australian based Institute, which has been tremendously successful and has an international reputation and so on.  

So anyway, he was around from the very beginning and he and Warren had a direct friendship and connection. That correspondence Warren never passed by me, because Bill Mitchell and Warren are, you know . . . 

Steve Grumbine (16:37): 

Okay. So, you know, having met you for the first time in UMKC, at the very first annual MMT conference, you know, I was struck by how, not only approachable you were, but how just absolutely affable you were. And I am not saying that like to pump you up, but just to say, I’ve been following this whole thing for almost a decade, long before Real Progressives came into play.  

And you know, when Stephanie got the opportunity to ride in with Bernie, you know, it really energized a couple of us to start this place. But you were one of those people, when I met you, that you were a bit more of an enigma because you seemed to be more than happy to be the guy behind the scenes, making all the things happen.  

Whereas some of the others are taking more of a front view, but when I heard you speak, I was like, wow, I’ve got to listen to him more. I really wanted to have this opportunity, because it was clear, Warren asked you to introduce him, Warren asked you to give the story. And when I heard it there, it was like, I had never heard any of this before.  

It was amazing. I was really, really excited. And I was like, I’ve got to have this on this show at some point in time. So I’m really thrilled that you allowed us to have this time with you. But I guess what I’m wondering is, being that you came into this as a new PhD, just gotten your PhD, you meet this guy who’s willing to throw money at this great idea he’s got, and he’s willing to see where it’s going.  

And now all of a sudden you’re involved from ground zero. What does it look like with MMT being a room of five people, to now MMT having hundreds and hundreds of people being talked about, you know, by the most popular politician in the world, quite frankly, in Bernie Sanders. And seeing Stephanie going around the world and seeing folks like Bill Mitchell, going out to GIMMS in the UK, seeing things crop up everywhere, people dying to learn MMT and so forth.  

That’s got to be incredibly gratifying at some level. You have been there from day one, 

Mathew Forstater (18:51): 

Right. Absolutely. And you have to roll with it because, I’d have to say every cliche in the book, if you love something, let it go or whatever. But like I said, people found their appropriate roles where they could. So with CFEPS, I really was doing quite a bit of administrative work. Of course, I still had my research and I always had my own areas, the environment, race and gender, these were areas that my colleagues didn’t really touch on.  

And I had seen immediately the potential for these ideas to contribute to the realization of so many things that I had hoped for, especially in those early days. I mean, Randy Wray, he was already very accomplished and brilliant. You know, I mean, I learned so much from, you know, he and Yon Kragle.  

For me, I’ve never seen myself quite in, you know, in these kinds of ways now, in the case of Stephanie and Pavlina, they were students when they were introduced to this. So, I mean, Pavlina came out to UMKC, she and I really ran Center for Employment and Price Stability together, as far as all the planning, the programming and the drive to make it so that the scholars could just, you know, focus on their scholarship as much as possible.  

So then Pavlina finally decided to join the PhD program at UMKC, and finished her own PhD and has gone on to achieve wonderful things. And maybe she felt a little embarrassed or uncomfortable that I said at that conference a couple of years ago that a best achievement for a teacher is for their student to surpass them, maybe surpass isn’t a good word, but that’s the way it should be.  

You know, that the students, they’re not just a carbon copy of their teacher, they do it their own way and with their own flavor and from their own angle and the contributions. And so getting back to your main question about how gratifying it must be. So, you know, when I realized this is no longer in my hands, you know, it’s in the hands of people like Steve Grumbine.  

So you want a generation of young people to take up the charge, but at the same time, it’s no longer in your hands, so you no longer control it. Right? So even the name Modern Monetary Theory was not something that we chose, right? At least not Randy or myself, or I don’t think Pavlina or Stephanie either.  

Maybe Bill was different, I’m not sure, but in any case, believe me, it’s such a great thing. I was down at the Modern Money Network, humanities division conference at the University of South Florida where Scott Ferguson is, and I mean to see all of these young people who are so articulate and smart and committed.  

And for myself, there was always a worry that you want it to be in the hands of people who will stick by their principles and who want to make economics a moral and ethical field once again, as it was in its origins. And I just felt absolutely that way with so many new friends who I met. And this is humanities, I mean, we were trying to get maybe a little sociologist or political scientist involved, which we did, and people who now are well known, we were able to introduce and shine a light on their work.  

And, you know, if we were able to help a little bit, that’s great. And one of the saddest things, and this is more of a statement I think on, I don’t know, academia, it’s probably that way in a lot of fields, anyway, it’s people, you know, some people will, if their friend achieves, they will just feel so happy for them sincerely.  

But you know, once in a while, there’s someone who feels jealous that should have been me or why isn’t it me, petty stuff. You know, you see it, it has nothing to do with MMT, it just happens to be that, imagine if you were doing work and then all of a sudden that new kids on the block, they get the ear of the most popular progressive politician in the country.  

And of course, I mean, that’s, It’s all been accomplished by Stephanie and the others, you know, which I played no role whatsoever, except staying out of their way. 

Intermission (23:50): 

You are listening to Macro N Cheese, a podcast, brought to you by Real Progressives, a nonprofit organization dedicated to teaching the masses about MMT or Modern Monetary Theory. Please help our efforts and become a monthly donor at PayPal or Patreon, like and follow our pages on Facebook and YouTube and follow us on Periscope, Twitter, and Instagram. 

Steve Grumbine (24:39): 

So, okay, so let’s go to the next thing, and that is this Green New Deal, which is being championed right now, as we sit. Alexandria Ocasio Cortez defeats incumbent corporatist, Joe Crowley. Suddenly she’s got the ear of the nation. People are looking at a young, vibrant Latino woman advancing this concept of equality and has got MMT coming into her ear and voila, we’ve got a Green New Deal and the Sunrise Movement advancing this thing in Nancy Pelosi’s office before she’s even been sworn in.  

How much of this has got an MMT thumbprint on it. How much of this maps back to things you’re doing at Global Institute for Sustainable Prosperity and what are the synergies with a movement right now for Bernie Sanders, for Progressive’s as a whole, and for quite frankly, the salvation of our species as we have obviously climate related changes that are coming, that if we don’t take drastic action on we’re in deep trouble, correct?  

I mean, keep me honest here, sir. 

Mathew Forstater (25:49): 

Absolutely. And as Alexandria Ocasio-Cortez and others have emphasized, it’s not only climate change. Climate change would be plenty enough, but there are a number of very dangerous and vexing environmental challenges ahead of us. And so I am so happy to see it. I have no insider knowledge, but I would be utterly shocked if the fact that the job guarantee as part of it is not directly and indirectly related to the question Warren Mosler asked me, not me, but you know, it’s not, it has to be yes, many people support the job guarantee and history, and I’ve done a lot of work to try to make people aware of this.  

But one of the exciting things that we were doing brought into let’s say heterodox economics, at that time in my view, is that it had, in some ways lost its way in terms of the policy focus. So even if you were not in agreement with our specific policies, the fact that policy discussion was back on the table was an important development because people can make a whole career out of debating obscure, theoretical points.  

And not that they’re never important, but especially where we come from, we say that being grounded in reality is, you know, what distinguishes us from mainstream economics. So heterodox economics can be just as oblivious sometimes as the mainstream. So I’m excited, and so you see, you know, the job guarantee in and of itself, okay, I can discuss that, and then maybe I won’t have to take a position on the financing, all the issues surrounding money and budgets.  

That’s when people start to get much more nervous, even though again, the insights of modern money theory in terms of money and government budgets, really not a lot brand new there. So it was the bringing of it all together, and then the developing of it. Now, a few years ago, another of my students, Mike Murray, who’s at Bemidji State in Minnesota, I’ve co-edited a few books and he, Fadhel Kaboub and I have this book series with Rutledge.  

So these kinds of concerns must be applied in the real world and the job guarantee without the money piece or the budgetary piece is not the same. It’s just not the same. So once that understanding and how it took people so long to figure it out is incredible because it’s really not that complicated, but if the money has no intrinsic value and the government is a monopolist in terms of national currency, and there’s a flexible exchange rate, then why would the federal government ever have to borrow from its citizens in order to spend?  

It makes no sense whatsoever. So it’s not that complicated, but to come out and publicly support that takes, in our world, courage. And that’s why it is so important, even somebody like yourself, because you are from Eastern Pennsylvania. Where are you from again? 

Steve Grumbine (29:39): 

I’m from DC. I’m a Washingtonian, but I actually live in the Harrisburg area here. So I’m . . . 

Mathew Forstater (29:50): 

Is that more of a Baltimore accent that you have? I would have thought that it was a Philly accent or Delaware accent. 

Steve Grumbine (29:57): 

You know, it’s interesting, it’s a Southern Maryland accent and I’m in Waldorf actually. I’m a graduate of UMUC, which is right there by the University of Maryland, the regular campus. So anyway . . . 

Mathew Forstater (30:13): 

Okay. Well then I can’t say the nice things that I was going to say about it 

Steve Grumbine (30:18): 

They were all overestated anyway. 

Mathew Forstater (30:19): 

What I wanted to say is that actually, I see you as a sincerely modest person, yet when it comes down to questions of principle, you are never going to step aside, but it takes a lot of courage, even what you’ve done. Listen, going back to something that you said, you know, earlier. Warren used to call me on the phone in the middle of the day at work, and he would say, so how many people in the world understand how money works now?  

And I would have to name them and I would get to maybe 11 or 12 and we would be debating each additional name that I mentioned. Because of course there were all people he and I knew. So that tells you something about where we started and that tells you something about Warren’s single minded focus. 

Steve Grumbine (31:20): 

I love the man for that. It feeds whatever it is inside me, because I have it too. I want to ask you a question because this is something that’s come up recently and it’s going to tie in both the Green New Deal, job guarantee and financing of these programs. So obviously, you know, heterodox is a difficult world to live in and you know, you’ve got folks like Ellen Brown who have slipped through with this public banking perspective.  

I’m so much less generous than other people are with this, because when I read it, I immediately am like, I don’t see the attraction. I don’t understand how she doesn’t get public debt, I don’t understand why she’s starting from this scary, scary feeling. And I know others can be far more generous with that, but you look over at Cory Booker, you’ll see where I’m going with this in a second.  

Cory Booker saying, “Hey, we can do a job guarantee, we’ll do a pilot here of three people and see if it works.” And then you’ve got others that are running around, talking about a different flavor of a Green New Deal, and hey, why don’t we do a really robust job guarantee where it’ll be all these high-end green jobs. That’s not a job guarantee. So how do you weed through all these alternative ideas that use cute sloganeering and buzzwords?  

When the reality is MMT is, Stephanie had the best tweet to demonstrate this, their way of paying for it, and it was a squiggle all over the place; our way, and it was just a straight line. And it was like, that is why I love this thing. But all these competing ideas, I mean, Ellen Brown said, well, if we have this wide ranging network of public banks, we’ll create them out of thin air, we’ll have a million public banks and all do all these things.  

And, you know, Raul had a great tweet out there the other day where he said, basically, “Hey, look, I’m all for local public banking, but let’s not try and make these things something they’re not. Why in the world would you put all these blockers in front of it instead of just telling Congress, do your job spend on it there.”  

Boom done. What is the fetish with creating these complex nonsensical ideas? Where does it stem from? I mean is it that hard to get the basics? 

Mathew Forstater (33:26): 

Well, look . . . 

Steve Grumbine (33:30): 

I put you on the spot there. 

Mathew Forstater (33:35): 

No, not at all. Of course, anything I say is only my opinion. I don’t represent any, you know, but the thing is that now I guess you have to decide where are the places where no compromise is possible and hopefully there’s not going to be a lot of those. Right. But, you know, I think I don’t have to say what those are for modern money theory.  

What’s the point if we’re going to be the same thing is deficit dove or worse than just the standard approach, then what’s the point? And then there’s other areas where if you don’t have any flexibility, you will soon find yourself alone. Because if you’re going to demand that people agree with you on every single point, it’s very rare even among the original founders, right, or whatever.  

So it’s important to know when and where flexibility is best and what core principles can there be no compromise on. 

Steve Grumbine (34:44): 

What would you say is the most important piece of legislation that from a GISP standpoint, from your standpoint, that would go into whatever this Green New Deal would be, if we’re able to even get it in front of Congress or whatever? What would be, in your mind, the single most important part? Would it be the job guarantee, are we really focused?  

IPCC says we’ve got 12 years, not to come up with a plan, but to have already taken drastic action before we start seeing significant problems. 

Mathew Forstater (35:17): 

What I’ve been trying to emphasize is that there is no single bullet solution, right? However, I do consider the job guarantee or green job guarantee to be the centerpiece or foundation, if you will, of the Green New Deal. It would not be the same at all without it. I would really need to hear what other proposal that doesn’t include a job guarantee could possibly get my support.  

But in any case, of course, the job guarantee, even outside of the discussion of the Green New Deal, the job guarantee is this kind of policy that can be a vehicle for other policies. So for example, minimum wage or living wage debate, right? So job guarantee program decides the job guarantee wage, a living wage, which most of us have been on record of supporting, but not everyone does.  

But in any case is a living wage, then that’s going to have an effect on the whole economy. You don’t have to have a separate living wage because it’s all bundled into the one, right? And same with healthcare. If job guarantee comes with health benefits, right? So this is kind of the way that we’ve described how it can be a vehicle for other policies, including environmental policies.  

That’s what makes bringing the two, sustainability and the economic piece, the job and income piece together has just been, they both are more popular together than either one is by itself. That tells you it all right there. 

Steve Grumbine (36:57): 

I want to ask this question. I read in Bill Mitchell’s blog the other day, and also in talking with Warren offline. And just basic understanding of what I believe the transition job, as Warren would call it is, when when we talk about creating a green job guarantee, there’s something fundamental there that I want to make sure I understand.  

The job guarantee as MMT has laid out in many different forums, speaks specifically to the automatic stabilizer that allows us to, you know, as the shocks of the business cycle come through, people roll on, people roll off, it provides a wage floor and so forth. But there seems to be an emphasis on the green part.  

And in talking with Warren a while back, he had made mention that it was like we’re going to be having a major dearth of available labor resources that we’re going to end up needing to take from the fire sector probably even, to fill in, to do all this Green New Deal stuff. I mean, it’s going to literally suck up elasticity of labor and then some.  

So when you say green jobs, are you referring to, you know, making those local jobs, green jobs like that are specific to addressing climate change, or is this a fundamentally different structure to a job guarantee? I want to make sure I understand the difference between the traditional, this is just the federal job guarantee, it’s a transition job and a green job guarantee. What would be the difference there? 

Mathew Forstater (38:34): 

Okay. This is a very important point for me, because it has nothing to do with the Green New Deal, of course, these kinds of names, Green Marshall Plan, Green New Deal, I mean, they’ve been around for a long time and they’re not new, right? So I started writing about the environment in relation to this work from the very beginning, 1997, you know, it’s all published.  

There’s nothing that can be debated about it. So I was looking at, and I didn’t call it green jobs at the beginning, because that seemed like a catchphrase or maybe that came later, I forget. But in any case, I would just say full employment and environmental sustainability or public employment and environmental sustainability.  

So the definition of green jobs is one of the most important issues. And people do not define green jobs the same as one another at all. Okay, for myself, what I mean, especially in this context, by green job guarantee, a job is green or a job is environmentally sustainable, if it does not harm the environment. 

Steve Grumbine (39:49): 

Okay. Fair. Yeah. I like that. 

Mathew Forstater (39:51): 

Whatever the actual job does, say it’s working in a library, okay, and so instead of closing the libraries, we’ll keep open 24 hours, and you know, there’s people who love books and can work in the library. Okay, so you’d like to say, well, what’s that have to do with the environment? You’re not depleting exhaustible resources or not depleting them as quickly, and you’re not polluting or not polluting as much.  

And so doing no environmental harm is the minimum criteria for a green job, for myself. So many of, almost pure services that use very few, uh, material resources, and certainly not exhaustible resources or high carbon, and low or zero ecological footprint – that’s a green job. So if people who want to use conventional Keynesian stimulus say, to try to reach full employment, so government just spends, and then the private sector activity goes up and the firms in the private sector are structurally enforced.  

There is structural enforcement by the very nature of the capitalist economy that competition creates such a pressure to use the cost minimizing method of production or technology, regardless of the impact on the environment. Now we could try to mess with that or whatever through taxes or whatever kind of policies, but you can’t expect under, certainly the current political and regulatory reality, that we’re going to see firms foregoing profits to be good to the environment.  

So government is not for profit. So the job guarantee activities are not subject to capitalist competition. So we can evaluate the job guarantee activities, according to broader criteria, the impact on the environment, the social impact or the broader macroeconomic impact, rather than private cost minimization, which makes no sense whatsoever.  

Although you hear people saying all the time that, oh, government is inefficient, what they mean is inefficient in the sense of a private sector firm. 

Steve Grumbine (42:23): 

It’s not going to make profit for somebody, right? It cracks me up, you know, we got this feedback a while back where somebody was saying, you know, why do we need people going out and getting basket weaving degrees or humanities degrees and you know, all these literature degrees and so forth. It’s like, don’t you want a society that’s well-rounded?  

Do you just want to live in a society where you’re an efficient consumption unit? I mean, what exactly does a functioning society look like? And what you just described to me sounds like giving people fulfillment at so many levels of society that it truly is a beautiful thing; and it does by its very essence, not do more harm.  

And I think that’s key. What I’d like to do is let you kind of close out, talk about what’s going on at GISP and how people can follow your work and so forth. And I want to thank you, too, by the way. 

Mathew Forstater (43:20): 

Thank you. And also to your team there, I mean Jimmy and Lana and Mark and all the, my new friends, you know, so really, I mean, and I saw how hard you work at the conferences and, you know, even though you all are committed and enjoy, but absolutely know you are appreciated. So GISP is www.global-isp.org.  

And you know, please like our Facebook page and all that stuff. Fadhel, students and everybody works so hard, I should do more. And visit our website. We have a green new deal special video series, first two are out third’s coming. Will be a couple more, we have to see sort of how the things develop, but we also have a number of other tremendous working paper and policy brief series and the research scholars.  

I mean, they’re not all doing work that’s the same as one another. Or even we have people doing work that’s not related to MMT in any way whatsoever. And that’s the way I wanted it, quite frankly, not that I didn’t want people doing that work, but that I wanted the new Institute to be broader and more interdisciplinary than, you know, traditionally like CFAPS or the Levy Institute.  

So anyway, Fadhel is the man, he’s the president for a reason. And I try to do as much as I can to support and so many students and researchers and just to everybody who just so delighted. And of course we’re so thankful for the funding that we’ve been able to receive. And I think everyone also joins us in appreciating the generosity of many people who could be spending their time in other ways, not worrying about, you know, whether this work’s getting done.  

So absolutely everybody should support the Real Progressives. I’m catching up now, I was watching, you know, some of the other ones that you’ve got up there. It’s fantastic. So, I’ve got some good viewing ahead of me. 

Steve Grumbine (45:35): 

We try. They’re a little rough because we’re speaking to a different community, but let me tell you everybody here is very passionate about the work you guys do. We’re all one big happy family, even just like a regular family at Thanksgiving dinner where we’ve got the uncle over here. Anyway, I want to thank you.  

This was a pleasure and tell Fadhel I said, hello. I’ll tell him too, but I really love you guys. You guys are amazing. So thank you. And we’ll talk soon. 

Mathew Forstater (46:04): 

Thank you, Steve. 

Steve Grumbine (46:06): 

You got it. 

End Credits (46:13): 

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